Social networking site MySpace has neither confirmed nor denied reports that it is preparing for a massive round of layoffs.
MySpace could be planning to lay off as many as 500 of its 1,600 employees in an attempt to cut costs and stay ahead of rival Facebook, according to US media reports.
"It is no secret that we are looking for ways to improve our products, increase the value of our digital assets and enhance the overall financial strength of the company," MySpace said.
The Los Angeles Times last week reported that MySpace owners, News Corp's Fox Interactive Media, had cancelled a plan to move to new offices in Playa Vista, California.
The company had committed to a 12-year, $350m lease, but said it was cancelling the move because of financial difficulties.
News Corp's $580m purchase of MySpace in 2005 was considered by analysts to be a brilliant move by Murdoch to enhance the media conglomerate's digital portfolio, according to Reuters.
Since then, advertising revenue has dropped and Facebook and Twitter have surpassed MySpace in popularity.